Kyle Rizdahl

Our preference most of the time is going to be to sell those loans to Fannie Mae.

Our preference most of the time is going to be to sell those loans to Fannie Mae.

Fannie Mae and Freddie Mac buy up truckloads of mortgages and package them into bonds called mortgage-backed securities.

Fannie Mae and Freddie Mac buy up truckloads of mortgages and package them into bonds called mortgage-backed securities.

That's Nancy Wallace, a professor at UC Berkeley.

That's Nancy Wallace, a professor at UC Berkeley.

She says investors love mortgage-backed securities because their steady stream of income from all of those mortgage payments is considered almost as safe as U.S.

She says investors love mortgage-backed securities because their steady stream of income from all of those mortgage payments is considered almost as safe as U.S.

treasuries, and they tend to pay slightly more interest.

treasuries, and they tend to pay slightly more interest.

The Trump administration is asking Fannie and Freddie to go back to doing something they did up until the financial crisis, buy the very bonds they're selling.

The Trump administration is asking Fannie and Freddie to go back to doing something they did up until the financial crisis, buy the very bonds they're selling.

Wallace says there'd be more demand for mortgage-backed securities, so Fannie and Freddie would need even more mortgages to go into those securities.

Wallace says there'd be more demand for mortgage-backed securities, so Fannie and Freddie would need even more mortgages to go into those securities.

And that means?

And that means?

And the theory goes, originate them at lower interest rates.

And the theory goes, originate them at lower interest rates.

Mike Frattantoni is chief economist of the Mortgage Bankers Association.

Mike Frattantoni is chief economist of the Mortgage Bankers Association.